Understanding Employment Norms in Uae: A Comprehensive Guide
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Hiring in UAE? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in UAE.

Employment Norms in the United Arab Emirates

The United Arab Emirates is a middle-eastern country with plenty of work opportunities for its citizens and foreign nationals. With its high GDP and excellent infrastructure, it attracts global talent.
While it is a great destination to expand your business, UAE has various norms and regulations. EOR services help new employers manage employee payrolls, taxes, etc. and ensure legal compliance.

General Information:

  • The currency of the UAE is UAE Dirham (AED).
  • Abu Dhabi is the capital of the UAE.
  • Arabic is the official language of the UAE. Documentation can be in Arabic. In addition to this, it can be translated into English and nine other recognized languages in UAE.
  • As of 2021, the GDP of the UAE was reported to be USD 415.72 billion.
The 'UAE Labor Law sets and executes all labor-related norms. These apply to all UAE nationals as well as expatriates. However, for some special categories, different regulations may apply.
Uae map

Table of Contents

  • Agreements
  • Onboarding Process
  • Visa
  • Minimum Wage
  • Payroll Cycle
  • Annual Bonus
  • Health Benefits
  • Working Hours and Overtime
  • Leaves
  • Social Security
  • Taxes for Employers
  • Taxes for Employees
  • Probation
  • Termination
  • Severance Pay
  • Employees or Contractors
  • Final Words


  • The employee and the employer must formulate a fixed-term labor contract. Full-time, part-time, temporary, flexible, remote, or job-sharing contracts.
  • This document shall follow all the norms and define the wages, terms and conditions, controls, and procedures.
  • The contract must either be in Arabic or should include an Arabic translation. The part in Arabic will be considered in case of contradictions.
  • For court procedures, English is also permitted since January 2, 2023.
  • Employees can work for more than one employer based on their visa status.
  • Non-compete restrictions up to 2 years from the termination of the contract can be included.
Onboarding Process

Onboarding Process

  • Since most employees in UAE are expatriates, the onboarding process requires the employee to upload documents such as -
    • Passport
    • Residency visa
    • ID cards
    • Next-of-kin and emergency contact details
  • The employer should also provide the employee with -
    • a copy of the contract
    • safety codes
    • healthcare details
  • The employer must review all the documents uploaded by the employee within 14 days of arrival into the country.


UAE Green visa: This is applicable for freelancers or skilled employees. The applicants can sponsor themselves for up to 5 years. Applicants must hold a -
  • valid employment contract/ freelance or self-employment permit from the Ministry of Human Resources and Emiratisationthe
  • bachelor's degree or specialized diploma
  • salary of AED 15,000 or more (for employees)
Standard work visa: This is valid for up to 2 years for employees in the private or government sector or free zone. The employer must apply for the standard residence visa.
Golden visa: This is a long-term renewable visa for 5 to 10 years. It is typically for high-income individuals such as investors, entrepreneurs, executive directors, specialized talents (scientists, inventors, etc.), outstanding students, etc.

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Minimum Wage

Minimum Wage

There is no mandatory minimum wage in UAE.
Payroll Cycle

Payroll Cycle

Generally, the payroll cycle is monthly. In UAE, the payment is usually made on the last working day of the month.
Annual Bonus

Annual Bonus

The administrative regulation determines the annual bonus. This is stipulated in the contracts or agreements.
Health Benefits

Health Benefits

  • Full medical coverage is provided to all UAE nationals under the respective emirates.
  • For resident expatriates, the employer must provide health insurance to the employees. In some emirates, the employer should also cover the employee's family.
Working Hours and Overtime

Working Hours and Overtime

  • Work hours: A typical work day is of 8 hours. The work week may be four and a half or five (Monday to Friday) days with a maximum of 48 hours per week. The work hours are flexible (remote or on-site) and can be set according to company policies.
  • Break: One or more breaks of at least one hour per 5 consecutive hours of work must be given. Break time is not considered during working hours.
  • Overtime: An overtime of 150% of the daily wage must be given for night and 125% for day-time work. This doesn't apply to shift-based work. Employees working on a day off must be given 150% of overtime pay.


Sick Leaves

Sick leave cannot be for more than 90 days. Employees are entitled to receive -
  • The full wage for the first 15 days
  • The half wage for the next 30 days
  • Unpaid leave for the next 45 days

Parental leaves

  • Maternity leave: Female employees can avail of 45 days of paid leave. Employers pay 100% salary to their employees, during this tenure. Employees who have not yet completed a year with the employer receive half the benefits of maternity leave.
  • For employees who have been working for less than one year, the paid leave is halved.
  • Parental leave of 5 days (for both parents) can be taken within six months of the child's birth.

Annual leaves

  • Annual leave is calculated as two days per month worked for at least six months of work. A 30-day annual leave is granted for those working for one year or more.
  • Part-time employees are granted annual leave based on the employment contract.

Other leaves

  • Hajj leaves: Employees in UAE are entitled to up to 30 days of unpaid Hajj leave. This leave can be taken only once during employment in that company.
  • Umrah leaves: There is no provision for Umrah leave in the labor laws of the UAE.

Public Holidays (for the Calendar year 2023)

Dates may change as per traditional calendars or official changes.
  • New Year's Day (January 1)
  • Eid al-Fitr holiday (April 20)
  • Eid al-Fitr (April 21)
  • Eid al-Fitr holiday (April 22)
  • Eid al-Fitr holiday (April 23)
  • Arafat day (June 27)
  • Eid al-Adha (June 28)
  • Eid al-Adha holiday (June 29)
  • Eid al-Adha holiday (June 30)
  • Islamic New Year (July 21)
  • Prophet Muhammad's birthday (September 29)
  • Commemoration day (December 1)
  • National Day (December 2)
  • National Day holiday (December 3)

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Social Security

Social Security

Social security in UAE is only available for UAE and Gulf Cooperation Council (GCC) nationals. A total contribution of 20% of the employee's salary is made, of which a contribution of -
  • 5% is by the employee
  • 12.5% is by the employer
  • 2.5% is by the government
For Abu Dhabi, the rate is 26%, with 5% paid by the employee, 15% by the employer, and 6% by the government.
Taxes for Employers

Taxes for Employers

  • The employer must contribute 12.5% of the employee's salary towards social security. The rate is 15% for Abu Dhabi.
  • Employers must also provide health insurance to the employee.

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Taxes for Employees

Taxes for Employees

Social security tax: Employees must contribute 5% of their income towards social security.
Income tax: There is no income tax in UAE.


The probation period in UAE can be for a maximum of 6 months.

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  • Either party can send a termination notice to the other for valid legal reasons.
  • The termination can be without notice only in certain serious conditions.
  • A mandatory notice period of at least 30 days to 90 days must be given according to UAE Labor Law. This applies to both parties.
  • The notice period may be reduced by mutual agreement.
  • All remaining payments must be completed within 14 days of termination of the contract.
Severance Pay

Severance Pay

  • Employees who have worked for 1 to 5 years are entitled to a severance pay of 21 days per year worked.
  • For more than five years of work, the employee is entitled to 30 days per year worked after the first five years.
  • For part-time work, the number of hours per year in the part-time contract is divided by the number of hours per year in the full-time contract and multiplied by 100. This percentage is multiplied by the severance pay in the full-time contract.
  • There is no severance pay for less than one year of work.
Employees or Contractors

Employees or Contractors

  • UAE's flexible working system treats employees and contractors as different entities.
  • Upon misclassification of the two, the employer may be subject to serious penalties.
Final Words

Final Words

As a popular global work hub for expatriates and nationals, the UAE is a great destination for business expansion. EOR services offer businesses a great opportunity to tap into this talent pool and seamlessly manage employee payrolls, benefits, taxes, etc.

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  • agreementsEmployment agreements as per local laws
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